Source of Funds will not be asked after 50% tax
this is not good. immunity. black will become white after 50% tax.
The tax department will not ask for the source of funds deposited in banks from November 10 -- post demonetisation of high value notes, if the entire income is declared and 50 per cent taxes paid on it, Revenue Secretary Hasmukh Adhia said on Monday (28 November).
The disclosures will enjoy immunity from Wealth Tax, civil and other taxation laws but there will be no immunity from FEMA, PMLA, Narcotics and black money law, he said.
Nearly three weeks after Prime Minister Narendra Modi announced junking high denomination currency notes, Finance Minister Arun Jaitley has introduced a bill to amend the Income Tax law to provide for a 30 per cent tax and a 33 per cent surcharge on such tax plus a penalty of 10 per cent for black money that is deposited in banks and declared.
In case the undisclosed income is detected later, a total tax and penalty of up to 85 per cent can be levied.
"The deterrent provisions were necessary so that people have the fear of hoarding black money," Adhia said.
The disclosures made in the Pradhan Mantri Garib Kalyan Yojana (PMGKY), that attracts 50 per cent tax, "will ensure that no questions will be asked about the source of fund. It would ensure immunity from Wealth Tax, civil laws and other taxation laws. But there is no immunity from FEMA, PMLA, Narcotics, and black money act", he said.
Deposits which have already been made from November 10 will be covered under PMGKY. "Last date we will notify after the bill is passed but it is likely to be December 30. PMGKY will come in as a new Chapter 9 in Finance Act 2016," he said.
Adhia said this was not a retrospective amendment as the financial year is still on and people have not filed return.
"We have seen that some people were trying to convert black money to black again by using new currency. So we have amended the 75-85 per cent provision," he said.
Adhia further said that the search and seizure provisions have been amended to ensure that there is fear among people about I-T raids.
There were instances that since 10 per cent penalty was to be paid if the unaccounted income was admitted at the time of seizure and returns were filed and taxes paid, people used to accept black money at the time of seizures.
"10 per cent penalty fear was not acting as a deterrent and evaders were misusing the provision. So there was a need for a deterrent provision," Adhia said.
As per the amendment to Section 271AAB, now penalty would be 30 per cent of unaccounted income detected at the stage of search and seizure is admitted and return is filed and taxes are paid. The penalty would be 60 per cent in other cases.
In order to install fear of law in the minds of people, Adhia said the government may take more steps against black money post December 2016 and asked people to take advantage of the PMGKY scheme.
He said PMGKY will be notified by the RBI. Proceeds from GKY will be utilised for the scheme of irrigation, housing toilet, infra, primary education, primary health, livelihood so that there is justice and equality. more
The tax department will not ask for the source of funds deposited in banks from November 10 -- post demonetisation of high value notes, if the entire income is declared and 50 per cent taxes paid on it, Revenue Secretary Hasmukh Adhia said on Monday (28 November).
The disclosures will enjoy immunity from Wealth Tax, civil and other taxation laws but there will be no immunity from FEMA, PMLA, Narcotics and black money law, he said.
Nearly three weeks after Prime Minister Narendra Modi announced junking high denomination currency notes, Finance Minister Arun Jaitley has introduced a bill to amend the Income Tax law to provide for a 30 per cent tax and a 33 per cent surcharge on such tax plus a penalty of 10 per cent for black money that is deposited in banks and declared.
In case the undisclosed income is detected later, a total tax and penalty of up to 85 per cent can be levied.
"The deterrent provisions were necessary so that people have the fear of hoarding black money," Adhia said.
The disclosures made in the Pradhan Mantri Garib Kalyan Yojana (PMGKY), that attracts 50 per cent tax, "will ensure that no questions will be asked about the source of fund. It would ensure immunity from Wealth Tax, civil laws and other taxation laws. But there is no immunity from FEMA, PMLA, Narcotics, and black money act", he said.
Deposits which have already been made from November 10 will be covered under PMGKY. "Last date we will notify after the bill is passed but it is likely to be December 30. PMGKY will come in as a new Chapter 9 in Finance Act 2016," he said.
Adhia said this was not a retrospective amendment as the financial year is still on and people have not filed return.
"We have seen that some people were trying to convert black money to black again by using new currency. So we have amended the 75-85 per cent provision," he said.
Adhia further said that the search and seizure provisions have been amended to ensure that there is fear among people about I-T raids.
There were instances that since 10 per cent penalty was to be paid if the unaccounted income was admitted at the time of seizure and returns were filed and taxes paid, people used to accept black money at the time of seizures.
"10 per cent penalty fear was not acting as a deterrent and evaders were misusing the provision. So there was a need for a deterrent provision," Adhia said.
As per the amendment to Section 271AAB, now penalty would be 30 per cent of unaccounted income detected at the stage of search and seizure is admitted and return is filed and taxes are paid. The penalty would be 60 per cent in other cases.
In order to install fear of law in the minds of people, Adhia said the government may take more steps against black money post December 2016 and asked people to take advantage of the PMGKY scheme.
He said PMGKY will be notified by the RBI. Proceeds from GKY will be utilised for the scheme of irrigation, housing toilet, infra, primary education, primary health, livelihood so that there is justice and equality. more
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I appreciate what Shri R. N. Chopra has posted The measures are well thought of and will be effective. There is a need to generate more employment specially in the building construction, roads, bridges etc. and beliee this is being looked into. more
Dec 03
Well Initially looking at the Scheme, A hardcore honest person may get annoyed, but if one look at it patiently then after a big shock of demonetization, some of the Black money hoarder may avail this opportunity and Money thus collected can be used for welfare of poor people and Giving tax relief to middle class working people. And never forget that this scheme comes in two steps. once is declaring by themselves and second is to catch them by noose by the govt then the penalty is not that simple. Secondly, The point is not to punish only the Guilty but to transform them so that they do not do it again. So it's a sort of rehabilitation program for Some crooks. more
Dec 03
Yes it is a good step but it has created hardship for the poor people. There is retrenchment of labour all round since public spending has reduce. Govt has to come out with some community development works to generate employment . more
Dec 03
We may have to repeat such acts of demonitisation again and and seal the loopholes for the next time. more
Dec 02
This move is good for ONE TIME, in future such people should be under IT and FEMA Scanner more
Dec 01
